Give education savings more power
A Registered Education Savings Plan (RESP) is a government-registered account designed to help families save for a child’s post-secondary education.
It combines tax-sheltered investment growth with access to government education incentives. Contributions are made by the subscriber for a named beneficiary, while the financial institution or plan provider acts as the promoter.
How an RESP works
An RESP has three key roles.
Subscriber
The person who opens and contributes to the plan, such as a parent, grandparent or guardian.
Beneficiary
The child or student who may later use eligible RESP funds for post-secondary education.
Promoter
The financial institution or provider that administers the RESP and its investments.
Lifetime Limit
Total contributions are limited to $50,000 per beneficiary over the life of the RESP.
Individual RESP or Family RESP?
Individual RESP
Designed for one child or beneficiary and useful when education savings are being built specifically for that person.
Family RESP
Designed for multiple related beneficiaries and may provide flexibility to share eligible grants and earnings among siblings, subject to RESP rules.
RESP contribution framework
There is no annual contribution limit, while the lifetime contribution limit is $50,000 per beneficiary. A common contribution target is $2,500 per year because it aligns with the amount used to calculate the maximum basic annual CESG.
Government incentives can accelerate education savings
Eligible families may receive federal and provincial education incentives deposited directly into the RESP.
Incentive | How it Works | Maximum Benefits |
|---|---|---|
Basic CESG | 20% match on the first $2,500 of eligible annual contributions | $7,200 lifetime |
Additional CESG | Extra 10–20% for eligible lower-income families | Included in $7,200 CESG maximum |
Canada Learning Bond | Available to eligible children even without a family contribution | Up to $2,000 |
Provincial Grants | Programs such as QESI and BCTESG where available | Up to $2,000 |
Tax-sheltered growth and student-focused withdrawals
1
Tax-Sheltered Compounding
Investments inside the RESP grow without annual tax while they remain in the plan.
2
Contributions Returned
Original contributions can generally be withdrawn without additional tax because they were made with after-tax dollars.
3
Educational Assistance Payments
Grants and accumulated growth withdrawn as EAPs are generally taxable to the student, who may have relatively low income.
If your child doesn’t go to school
The RESP can still provide planning flexibility if the original beneficiary does not pursue post-secondary education.
1
Transfer to a Sibling
The plan may be transferred or redirected to an eligible sibling, subject to RESP and grant rules.
2
Transfer Earnings to an RRSP
Up to $50,000 of accumulated earnings may be eligible for transfer to an RRSP when the applicable conditions are met and sufficient RRSP room is available.
3
Withdraw Contributions
Original contributions may generally be returned to the subscriber, while government grants may need to be repaid.
4
Review the Best Option
The right course depends on the plan structure, beneficiary situation and applicable RESP rules.
Why choose TruCover for your RESP?
We help coordinate contributions, investments, available grants and withdrawal planning around your family’s goals.
1
Tailored Investment Strategy
Use a glide-path approach: more growth focus when the child is young and more capital preservation as post-secondary education approaches.
2
RESP Structure Guidance
Choose between individual and family RESP structures based on your family’s needs.
3
Grant Optimization
Review available CESG, CLB and relevant provincial incentives and coordinate contributions with eligibility rules.
4
Clear Withdrawal Planning
Understand how contributions, grants and investment growth may be withdrawn when post-secondary education begins.
Frequently Asked Questions
There is no annual contribution limit, but the lifetime contribution limit is $50,000 per beneficiary.
A $2,500 annual contribution aligns with the amount used to calculate the maximum Basic CESG for that year, subject to eligibility and available grant room.
Depending on the circumstances, options may include transferring the RESP to an eligible sibling, withdrawing original contributions, or transferring up to $50,000 of accumulated earnings to an RRSP when applicable conditions are met.
Original contributions can generally be returned without additional tax. Grants and accumulated investment earnings paid as EAPs are generally taxable to the beneficiary.
An individual RESP is built around one beneficiary, while a family RESP can include multiple related beneficiaries. The best structure depends on your family and savings objectives.
Quick Assistance